When exercised, theres no speedy taxable money, and when held with the demanded interval, any financial gain on sale is taxed as very long-expression funds gains in lieu of standard cash flow.

An extended expiration can also be handy because the solution can retain time price, even when the stock trades underneath the strike cost. A possibilitys time value decays as expiration techniques, and options purchasers dont want to observe their purchased options decrease in benefit, probably expiring worthless Should the stock finishes beneath the strike more info selling price.